1951-04-25

[Stage Direction]
Third report of special committee on railways and shipping owned, operated and controlled by the government.-Mr. Cleaver.


Mr. Matthew MacLean (Cape Breton North and Victoria) moved: that the first report of the standing committee on standing orders, presented on April 23, be concurred in.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Browne (St. John's West):: What amount of money was collected In Newfoundland, for (a) income tax; (b) succession duties; (c) customs duties; (d) excise duties, for the respective years April 1, 1949, to March 31, 1950, and April 1, 1950, to March 31, 1951?


Mr. McCann:: Fiscal year	(a)	(b)ended Income Tax Succession Duties 31st March	Collections	Collections1950	$ 4,077,867.03	$ 86,082.421951	$10,855,407.33	$232,871.55
(The figures for the fiscal year ended 31st March, 1951, are preliminary and subject to revision.)
(c)	Customs duties
Fiscal year 1949-50, $3,407,441.40; Fiscal year 1950-51, $3,467,699.57 *(eleven months to February 28, 1951.)
(d)	Excise duties
Fiscal year 1949-50, $1,340,856.14; Fiscal year 1950-51, $1,409,221.68 ^(eleven months to February 28, 1951.)
^Revenue returns from the province of Newfoundland furnished for eleven months to February 28, 1951, as returns for month of March, 1951, are not complete.


CANADIAN NATIONAL RAILWAYS SECURITIES TRUST
Mr. Balcom:: 1.	Of the $1,327,122,892.41 assets, as shown in annua] report of the Canadian National Railways security trust, what is the estimated present market value?
2.	What amounts, in the way of expenditures, if any, are charged against this trust fund?
3.	What is the nature of the charges?
4.	What amount is paid to the firm of George A. Touche & Company, accountants, for services rendered in connection with this fund?


Mr. Benidickson:: The Canadian National Railways advise as follows:
1.	The amount represents prior indebtedness to government by system companies and has no market value.
2.	Nil.
3.	See answer to No. 2.
4.	The Canadian National Railways securities trust is a corporation comprised within the Canadian National railway company, and the audit of the national system includes the securities trust.


COMBINES INVESTIGATION ACT
Mr. Diefenbaker:: 1.	How many cases of alleged domestic combination in restraint of trade have been investigated under the Combines Investigation Act since the first day of January, 1950?
2.	(a) Have any reports of investigations under the said act been made by the combines commissioner to the Minister of Justice since the first day of January, 1950; (b) If so, respecting what commodities?
3.	How many complaints of alleged injurious restraints of trade have been received by the combines investigation branch during the said period?
4.	What prosecutions, if any, arising out of any investigations that have taken place since the first day of January, 1950, have been initiated or launched?
5.	Have any actions been taken in the said period by the Minister of Justice or the combines investigation branch in the exchequer court to impeach any patents? If so, how many of such actions have been taken, and against whom?


Mr. Garson:: 1.	(a) Inquiries into two industries, commenced prior to January, 1950, have been continued and are in advanced stages. Of these, one comprises six distinct and major branches and the other comprises two distinct and major branches.
(b) In two additional cases commenced after January, 1950, preliminary reports were made to the minister to the effect that

Questions
the evidence obtainable did not definitely indicate a combine but the situations would be kept under surveillance. One of these related to the sale of bread in a maritime province, and the subject of the other cannot be disclosed without danger of prejudice to further inquiry.
(c)	In one additional case commenced after January, 1950, extensive hearings were held and an interim report is under preparation. The subject matter cannot be disclosed for reasons similar to those above mentioned.
(d)	In addition to the foregoing, there are a large number of matters commenced after January, 1950, in various preliminary stages of inquiry, but it is not known at their present stages which or how many of them will lead to formal investigation,
2.	(a) Answered by No. 1; (b) answered by No. 1.
3.	Seventy-five, none of which was a formal application under section 11 of the act. Some such complaints were bare assertions of the existence of a combine, and many others indicated no substantial evidence. These complaints were all examined, and, where the evidence submitted or obtained justified, they have been carried into various stages of inquiry or investigation. In addition to these seventy-five cases, trade in many other commodities, in respect of which no complaints were received, was examined upon the initiative of the commissioner.
4.	No prosecutions have been initiated or launched with respect to matters arising out of inquiries subsequent to January 1, 1950. Prosecutions since January 1, 1950, have been taken with respect to an alleged combine in the distribution and sale of flat glass in Ontario and Quebec; with respect to an alleged combine in the bread-baking industry in Saskatchewan, Alberta and British Columbia, and with respect to an alleged combine in the manufacture, distribution and sale of wooden matches throughout Canada. These prosecutions arose out of investigations completed prior to January 1, 1950.
5.	No. Two actions commenced prior to January 1, 1950, are now on appeal in the Supreme Court of Canada.



STEAMSHIP SERVICES


Mr. Pearkes:: 1.	What companies are engaged in the carriage of freight and/or passengers in the coastal waters of British Columbia?
2.	Which of these companies operating in the coastal waters of British Columbia receives subsidies from the federal government?
3.	What are the amounts of the subsidies paid to the respective companies?

4.	What is the gross revenue of the companies in receipt of these subsidies?


Mr. Benidickson:: 1.	No complete official records are available. Many of these companies operate under provincial charters.
2.	(a) The Canadian Pacific Railway, for the operation of the Victoria and west coast-Vancouver island service.
(b) Union Steamships Limited, for the operation of services between Vancouver, northern British Columbia ports and Queen Charlotte islands.
3.	(a) $100,000 per annum; (b) $345,000 per annum.
4.	It is not the policy to disclose financial information which is provided confidentially by companies operating subsidized services.



GOVERNMENT ANNUITIES

Mr. Calherwood:: What Is the total amount of government annuities purchased by the people of Canada during the years 1949 and 1950?


Mr. Gregg:: Amount of annuity contracted for:
Calendar Year	Individual Contracts	Group Registration Certificates1949	$3,956,357.00	15,234 *1950	3,807,253.00	12,965 ** These figures represent the new employees registered under	number of group contracts during each of the calendar years 1949 and 1950. The amount of annuity which will ultimately be purchased by these employees cannot be determined at this time, since it depends on length of service with their company, age, and amount contributed on their behalf during the period of employment. The average amount of annuity already being paid under group contracts is approximately $500.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Noseworihy:: 1.	What financial assistance, if any, was given by the federal government to Massey-Harris Company, John T. Hepburn Company, Dominion Radiator Company and Dominion Bridge Company, during the years 1939 to 1945 inclusive, in the form of subsidies, loans and special depreciation for buildings and equipment?
2.	What is the total value of government contracts awarded to each of these companies during the years 1939 to 1945 inclusive?


Mr. Bradley:: Return tabled.


TRADE OFFICES
Mr. Calherwood:: 1.	What countries maintain trade offices in Canada?
2.	In what countries does Canada maintain trade offices?


Mr. Lesage:: Return tabled.



RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: should like to direct a question to the Minister of Transport, on a matter which has been up before. Today I received several strong representations from several towns in Saskatchewan, asking whether the minister is in a' position to say what has been done since he last reported on the question of the securing of necessary cars to move the wet and damp wheat. The situation is very serious in certain places where the elevators are congested and marketing is at a standstill.
Hon- Lionel Chevrier (Minisier of Transport): The hon. gentleman was good enough to advise me that he would ask this question, and I have prepared a statement which I think covers the position as of today.
On April 9, when I placed on Hansard a summary of the situation as it was then, I stated that the last date for which data were available was April 6, and that indicated an unfavourable balance to Canadian lines of 10,805 box cars. On April 13 there were 18,129 United States box cars in Canada and 28,620 Canadian box cars in the United States, leaving an unfavourable balance of 10,491, or a reduction of some 300 cars from the previous report. One week later, on April 20, there were in Canada 18,882 United States cars, while Canadian cars in the United States had dropped to a total of 26,315, leaving an unfavourable balance of only 7,433. This indicates, therefore, that between the height of the unfavourable balance of
18,000	in early March to April 20 there has been an improvement of some 11,000 cars.
As to the problem of the movement of grain in western Canada, the committee to which I referred during the discussion of my estimates held a meeting early this week, and it gave to the situation full consideration. I was advised this morning by the deputy minister of transport that grain is moving rapidly from the head of the lakes to eastern Canada, and that at the end of this month it is expected that 27 million bushels of grain will have moved. In other words, we shall be ahead of shipments by that amount over 80709-152
Inquiries of the Ministry last year, in that at this time last year navigation had not yet opened.
The situation in Vancouver is not quite as favourable as the chairman of the wheat board would like to see it, and that is without doubt the most pressing problem at the moment. We have, however, the assurance from our two major railways that an improvement should take place within the next few days, as more and more box cars are being diverted to grain traffic. From 350 to 400 empty box cars are moving west from the east each day, and that will continue until the full quota necessary to move the wheat crop is on western lines. My last information indicates that there are nearly 45,000 box cars in western Canada at the present time, which is still some 4,000 less than last year. Some three weeks ago, however, the figure stood at 9,000 cars less than last year.
The box car shortage in the western United States has eased up considerably, and Canadian cars will now return directly to western Canada. This will also contribute to improving the situation generally and relieve the railways of a long haul in the movement of empty cars from eastern Canada.
Consideration is also being given by the railways and the wheat board to the operation, if necessary, of special trains on branch lines when there is sufficient traffic to warrant their operation. In any event, I can assure the house that every aspect of the problem is being carefully looked into by the committee to which I referred, and any measure which will help to improve the utilization of box cars in western Canada will be taken.


Mr. Argue:: May I ask a supplementary question? Is it the opinion of the minister, on the basis of the information he has, that the situation will improve to the extent that all of the 1950 crop may be moved off the farms?


Mr. Chevrier:: The report which I have made indicates that a great deal of progress has been made, and beyond that I would go no further.


Mr. Fraser:: I should like to ask the Minister of Transport a question. In order to keep this grain moving by water, what steps are being taken to eliminate the constant delays on the Lachine canal such as we have had since the canal opened this season? Ships were tied up-


Lionel Chevrier: Any repairs which have been made to the locks on the Lachine canal would not in any way impede the movement of the 27 million bushels of wheat to whi"h I referred a moment ago.

Inquiries of the Ministry


Gordon Knapman Fraser: A number of ships were held up for many hours this month in the Lachine canal owing to power break-down. I should like an answer.


Mr.   Si. Laurenl@: You are not asking a question; you are making a statement.



FLOOD CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinlon):: May I
direct a question to the Minister of Public Works? In view of the disastrous flooding and erosion at Toronto island and the federal interest in Toronto harbour, will the Minister of Public Works indicate what assistance the government is prepared to render there to withstand the onslaught of high water eroding the shore?


Hon. Alphonse Fournier (Minister of Public Works):: This is the first time that I have heard of the situation in Toronto. Be assured that I will look into it and do my best for that grand city.


Mr. Graydon:: You had better come down this week end.



COMBINES INVESTIGATION ACT


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: May I direct a question to the Minister of Justice? Will the placing of newsprint under government control, as announced a few days ago by the Department of Defence Production, affect in any way the right of the combines investigation commissioner to inquire into that industry if he wishes to do so?


Hon. Siuart S. Garson (Minister of Justice):: My hon. friend has given me no notice of this question; therefore I had better take it as notice and bring down an answer tomorrow.



COMPENSATION FOR T.B. REACTORS

Mr. Robert McCubbin (Parliamentary Assistant to the Minister of Agriculture):: Yesterday, the hon. member for Huron North (Mr. Cardiff) asked the Minister of Agriculture a question which I should like to answer at this time. The question is:
I should like to ask the Minister of Agriculture a question with regard to the cattle in my district that have reacted to the tuberculin test. The farmers have not yet been paid for the animals that have been condemned. It is now six months o-r
[Mr. Chevrier.l

more since the test was made. Many of the farmers had to replace the cattle and borrow the money to do it. Why has this money not been available?
The answer to this question, Mr. Speaker, is that all claims that have complied with departmental regulations have been paid. There was a short delay during the month of March, as the amount of money that was in the estimates to pay for t.b. reactors ran out along about the end of February, and until the supplementary estimates were passed at the end of March, no money was available during that month. But all these cheques went out the first part of April, so that the money will be in the farmers' hands long before now. There are still some sixty-five claims in the county of Huron that have not been paid, but as soon as they comply with the regulations they will be paid.



VISITORS IN GALLERY


[Stage Direction]
On the orders of the day:
Mr. Edgar Leduc (Jacques Cariier):: May I
be permitted to inform the house that we have seated in the gallery 120 students from Lachine high school? I do not know their party affiliations, but I do know that they are among the best pupils in Lachine and vicinity.



THE BUDGET


[Stage Direction]
The house resumed, from Tuesday, April 24, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood).
Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, I think it is fair
to say that those who criticize this budget do so in no spirit of hostility to the government because it is called upon to levy greatly increased taxes.


Mr. Cruickshank:: Is that the big lie?


George Alexander Drew: Every hon. member knows that Canadians, along with the people of every other free nation, must spend large sums to strengthen their defences now and in the years ahead. We know that greatly increased expenditures must be made for that purpose. What we have criticized, and what we have really hoped the government might still reconsider, is the fact that this budget will do nothing to hold down the cost of living,

but that on the contrary it will increase the cost of living by the very way in which the taxes are levied.
In the course of this debate the attitude of the government has been very largely that all is well, that there is no need to do anything about the cost of living or the inflation we see taking place day by day. The interesting fact is that no one has come forward from or on behalf of the government to answer in any way the analysis of the budget made by the hon. member for Greenwood (Mr. Macdonnell), and others who followed him in the debate.
It should be remembered that just before the budget was introduced a motion was brought before the house calling for consideration of the increased cost of living. At that time it was said on behalf of the government that it was unfortunate that the motion had been made at that particular time, because the budget which was to be introduced on the following day would indicate the measures the government intended to take to control the cost of living and to deal with inflation. Therefore we looked for something in the budget which would vigorously and directly tackle this major domestic problem. Instead of that, the budget indicates no positive action by*the government to deal with the rapidly rising cost of living and with the inflation which goes hand in hand with it.
In many of the discussions which are taking place outside the house it is noticeable that there is not the same concern about inflation in some quarters as there is in others. There is no doubt about what people on pensions, people on small incomes and the average worker think about the cost of living at this time. There is no doubt about the seriousness of the problem confronting every housewife in Canada today. Nevertheless there are arguments put forward which indicate that there are others who do not take the same attitude.
It is necessary for us to remember that there are people who do not mind inflation. It is necessary for us to remember that there are people who appear to benefit temporarily by inflation. Perhaps there are some hon. members who are aware, and who may have acted upon their awareness, that during a period of continuing inflation there are apparent gains to be made in the stock market, and there are similar gains to be made which are not so openly disclosed day by day-simply through the artificial process of increasing prices.
For the time being those who realize these apparent benefits do not object seriously to 80709-152J
The Budget-Mr. Drew inflation-that is, so far as it affects activities of that kind. What is necessary for all of us to remember, however, is that ultimately no one benefits by inflation, because either we go on endlessly to the point where money is degraded to the extent that it has very little real value, or the inflation is halted; and that at the point at which it is halted those who apparently benefited must, like everybody else, pay the penalty of the inflation in what they hold, whether it be in the form of property, investments or otherwise.
For that reason there is no person who in the end really benefits by inflation. But as representatives of the people the important thing for us to remember is that no matter how many persons may seem to benefit temporarily, the overwhelming majority of the people in Canada and in other countries are not in a position to take advantage of any of the devices by which some of the impact of inflation can be avoided. They are the ones who suffer; they are the ones who are the least able to suffer.
It is because of that fact that there is no other subject, even including national defence itself, which calls more urgently for consideration than the inflation which is now taking place, with its inevitable result, a constant increase in the cost of living. There is however this fact that we must also remember when we consider national defence. It was pointed out by the Minister of National Defence (Mr. Claxton). Speaking in the United States not long ago, he referred to the difficulty there would be in meeting some of our defence requirements because of the increased costs that are developing day by day. As inflation increases, our ability to produce the machines, weapons and equipment for defence is lessened in exact proportion to the amount of inflation that has taken place.
Therefore we are dealing not only with the plight of the majority of Canadians who are attempting to meet obligations in their own homes and in their lives from day to day, but with the vitally important question of defence, upon which the future security and perhaps the very survival of this country as a nation is going to depend.
It is with that approach to the seriousness 'of the question that I put forward the arguments I shall present, in the hope that even at this stage the government will be prepared to reconsider some of the inflationary taxes it has announced it intends to impose. Already there has been reference to the famous statement of Lenin, that to create revolution you need only to wreck the currency of a country.

The Budget-Mr. Drew


Mr. Abbott:: "Debauch" is the word he used if you wish to be accurate.


George Alexander Drew: The truth of that is obvious, because in countries where currency loses its value-and may I say it has lost its value, and completely lost its value, in countries where there were ministers of finance just as confident as the Minister of Finance in this country, and just as over-confident in their assertions of their own ability to meet the problem-in those countries, with a long history of government behind them, they have seen the value of their currency disappear entirely. In many of those countries there has been revolution and a spread of communism, for no reason other than the fact that the fertile soil was prepared to receive the argument that the system which had permitted conditions of that kind was not a system worth preserving.
When I argue, and I am sure when others do, that every possible step should be taken to protect the living standards of our people, we are arguing both for steps which will assist our people to meet these tests that are going to continue for many years, and also for the one thing which will preserve confidence in this system which we are trying to preserve by the vast expenditures we are pouring forth on defence.
That being so, we must approach this whole problem with the recognition that everything that is done to save and protect our currency, everything that is done to hold down the cost of living, is not done simply for the comfort and benefit and happiness of our people, vitally important though that may be, but also because it is part and parcel of the vast struggle which is taking place today throughout the whole world against the threat of communism.
When we were told that the budget was going to deal with these things, it was not only the members of this house who thought that they would be hearing some important announcement. As usual, reports had gone out over the wires-from supposedly reliable sources, as they are described without any name being attached-indicating the important steps that were to be taken by the government to deal with this problem. But instead of dealing with the problem, the government has actually aggravated it by following a course which in itself is inflationary, even if the inflationary trend had not already been apparent.
The budget is inflationary, and the Minister of Finance has made it clear that there were other methods that could be employed. He has made it perfectly clear to the members

of this house, and through this house to the people of Canada, that this is only a stopgap, and that if this whole condition continues, other devices will be employed. I suggest that the situation has already been reached where those other devices should have been employed and when other taxing methods should have been applied.
There are many ways in which this budget is inflationary. One of the important ways in which it is inflationary is that there is a clear indication that this budget is intended to produce a larger surplus than the surplus indicated in the formal announcement of the Minister of Finance. When some question was raised in regard to this by the hon. member for Greenwood, the Minister of Finance said-I am not quoting the exact words, but I feel sure he will agree this is their effect-"Of course you are forgetting the debt retirement."
One of the principles of the preparation of a budget is that the members of the house should know exactly the purpose for which they vote money. If the intention is to have a certain debt retirement, then that should be indicated in the budget. Certainly members of this house will support the idea of debt retirement, and certainly members of this house will support every sound measure when it is put forward and properly explained.
The Minister of Finance does not answer in any way the unchallenged statement that there has been a huge miscalculation, reaching many hundreds of millions of dollars, by simply saying to the house, "We had a surplus, but we applied it on the debt." If there is to be debt retirement, then it is for the members of the house to say there is going to be debt retirement, and how much it should be. Anything else simply means that the budget statement deceives the representatives of the people. No matter how worthy the declared object may be, that in no way lessens the incorrectness of a course of that kind in preparing a budget for this house.
It is obvious also that the Minister of Finance is budgeting in the belief that this inflation is going to continue. In his budget statement he bases his tax estimates on a gross national product for the coming fiscal year of $20 billion. There could not be such a gross national product in this coming year unless there is further inflation.


Douglas Charles Abbott: Oh, rubbish!


George Alexander Drew: The Minister of Finance knows perfectly well that while there is going to be a very large increase in the gross national product from increased production, there is no

contemplated expenditure on increased production in this country that will take up the increase that would bring us up to $20 billion. The Minister of Finance has admitted perfectly frankly that a large part of these surpluses was made up of apparent increases in tax collections because of the effect of inflation, and it is obvious that the minister is contemplating that possibility in the months ahead.
Let us come to the question of price control. Some members of the government outside this house have rather appeared to seek commendation by statements that they do not intend at this time to introduce price controls. It is not necessary, therefore, to examine this situation from the point of view of what the government itself has stated. The fact is that the principle of price control has been established in this house by this government and not by anyone else.
It was the government itself that stated that it was preparing to impose price control. The government did so when the emergency bill was introduced last September. The stated purpose of the wide powers in that bill was to be able to deal with the effect of the special expenditures that were to be made on defence. Then we come to the bill that was introduced and which became law during the present session, the Emergency Powers Act. The minister who takes the credit for drafting that bill, who informed us that he was responsible for the drafting, the Minister of Trade and Commerce (Mr. Howe), stated that the extremely wide powers in the bill were for the purpose of price control.
This, then, is no longer an issue so far as the government is concerned. The government has established the principle. The government surely cannot tell us that the intention behind the Emergency Powers Act is not to introduce price control when it got that bill passed by this house with the statement that it was. That certainly would be improper and beyond the point that one could easily contemplate, even with this government.
It should be remembered exactly what the Minister of Trade and Commerce did say in regard to this measure before it came to the house. He is reported on page 185 of Hansard of February 8, 1951, as saying:
At its last session, parliament enacted a measure authorizing the government to control prices of materials where shortage is caused by defence purchases.
Do not let any member of this government suggest that someone else has introduced the subject of price control here. That is what the minister said in a speech before the bill
The Budget-Mr. Drew was introduced to the house. Then the minister went on to say:
Up to the present time, defence purchases have not been of sufficient volume to be in themselves responsible for shortages, although prices of steel and other war materials have been kept under close observation. Obviously a more comprehensive price control bill is needed for any effective control of the Canadian economy, and it is such a bill that you will be asked to consider.
These are the words of the Minister of Trade and Commerce, the man responsible, according to his own statement, for the drafting of the bill. His explanation is that the wide powers were necessary so that there could be price control where government buying forced up prices artificially. The principle being established, the question therefore, is only, when? After all, the government with its majority is in a position to carry out a principle it has established. It is in a position to carry out the purpose for which this bill was introduced, according to its own statement, and members of this house have the right to say: If that was the purpose of the bill, then carry out the purpose. Whether or not the bill was properly drafted, it was drafted for this purpose, and there is an obligation to the people of Canada to carry out the stated purpose of the bill passed by their representatives in this house.
When we say that flexible price controls should be placed on those things which are artificially in short supply because of government purchases, we are simply saying to the government: Do what you said you were going to do first of all last September and then in February of this year. If you are not going to do it, tell the people you are not going to do it, and repeal the bill you passed for that purpose. If you do not do that, if the government is unwilling to carry out its stated purpose, then of course the whole situation is different. If the government does not intend to use the Emergency Powers Act as it said it was going to, then the act in its present form should be repealed immediately, because the support of the members who voted for it would then have been obtained under false pretences.
Inflation can be tackled in other ways than by price control, and that has been said by every speaker on this side of the house. Certainly the first way to tackle inflation is by production which will meet both civilian and defence requirements. When we speak of flexible controls, we mean those controls, which, with all the experience gained during the last war and in the years afterwards, this government is able to apply temporarily, in the simplest possible way to meet the artificial situation created by heavy buying.
I of certain types of commodities or products.

The Budget-Mr. Drew Just as soon as production has been stepped up to meet both defence and civilian requirements, those controls should be removed so that we can get back to the normal interplay of prices in that area. After all, that would appear to be what was contemplated by the Minister of Trade and Commerce when he introduced the bill in the very words he used when he explained what was going to be done.
What I suggest is that the government must not give undertakings of this kind and then not carry them out, because it is not just a question of whether or not it has lived up to its undertaking. When the government says that certain things of this kind are going to be done, immediately there is inflation by invitation, and there has been inflation by invitation. The Minister of Trade and Commerce put it succinctly when he said that those who would be affected had made arrangements accordingly, and he added: In other words, they are all set. He was telling the house and the people of Canada that there had been inflation by invitation to a point where those who would be affected were all set to meet the situation to their own advantage. Perhaps he was wrong, but if he was wrong he is the one who is responsible for the statement and not any other member of the house. He, after all, is the minister who is supposed to have the most information with respect to this particular subject.
I said there were other ways of meeting inflation. They have been mentioned in this house before. There are other ways than production. Immigration is one of them. There will be an opportunity to discuss immigration in detail on other occasions. The subject has been referred to in the house, however, and certain comments have been made about our immigration methods. I simply want to say at this time that the government is not seriously tackling the question of immigration. The government has not set up the kind of machinery to handle immigration that indicates any real belief in immigration to this country at this particular time. It is simply going through the motions to the extent that will make it possible to say that it is doing something to meet the situation.
If the members of the government think that they are really tackling immigration at the present time, then they should examine some of the other methods now being followed in London and elsewhere by other countries and by other legislative jurisdictions to encourage immigration. Others are doing it in such a way as to make it possible for the immigrant to believe that we really

want him in this country. Arrangements are set up by others so that an immigrant can come into one building and get everything in that building from his medical examination right through to his passport and the exchange of his money into Canadian dollars. This government has not yet really given evidence of a desire to do the thing that would in itself be the most anti-inflationary thing that could be done, namely, to build up our productive capacity by inviting to this country the skilled brains and skilled hands of people of good character who will take part in employing the vast resources of Canada for the common defence of civilization.
Then we come to the question of cutting non-defence expenditure. The government has not said very much this time with regard to that. In fact not a member of the government has really met that subject since the debate started. The only statements that have even attempted to deal with this question have been statements that cannot be taken as authoritative so far as the government is concerned.


Douglas Charles Abbott: I took about twenty minutes to talk about it.


George Alexander Drew: I said, since the beginning of this debate.


Douglas Charles Abbott: Since the beginning of the debate.


George Alexander Drew: Certainly when the debate
started was after the budget was presented.


Some hon. Members:: Oh, oh.


Douglas Charles Abbott: You pays your money and you takes your choice.


George Alexander Drew: There is no use trying to split hairs about this.


Some hon. Members:: No.


George Alexander Drew: The Minister of Finance knows perfectly well that there was no debate in this house on the budget until, the budget was before the house. Supposedly he and his officials were the only ones who knew what was in it until it was read in the house on that night.


Mr. Fulton:: He did not say anything ir. the twenty minutes, anyway.


Douglas Charles Abbott: The first speaker does not count. I think that is right.


George Alexander Drew: No, the first speaker in this case counted a lot, because the first speaker was the man who started this whole thing off on the wrong course, and we are still hoping to correct it. These demands for the cutting of non-defence expenditure are constantly made, Mr. Speaker.


Mr. Sinnolt:: Turn around the other way.


George Alexander Drew: Everything is all right with the world when we hear that voice.
The statement that non-defence expenditures can be cut is frequently met by the meaningless reply that nothing is put before the house which would indicate how that could be done. Well, yesterday the hon. member for Kamloops (Mr. Fulton) gave many examples, up to the point when his time ran out, where expenses could be cut very substantially. I am prepared to say that I do not believe there is a single member of this house who does not know many places where expenditures could be cut, from his own observations here and in other parts of Canada. But we were given certain examples, and in a debate of this kind it is only possible to give a limited number of examples. Let us take another example of the sort of thing which does lend itself to possible economies without in any way weakening the strength of this country in these critical hours. Canada has become conference crazy as far as this government is concerned. Last year we sent delegations to 168 conferences. Undoubtedly some of those meetings were very important. Certainly the conferences connected with the activities of the United Nations were important; the Colombo conference was important, and so were a number of other conferences attended by our representatives. But I wonder how important to the government and the people of Canada was a conference described as the international congress of chocolate and cocoa manufacturers, which was held at Lausanne last year. There are many excellent candy manufacturers in this country who would receive great benefit from attending a conference of that kind, and doubtless did; but as the representatives of the people, we have yet to hear in this house of anything of importance gained by Canada through the delegation which attended that conference.


Mr. Pearson:: There was no delegation.


George Alexander Drew: And I do not know that we have heard anything of what was gained by our attendance at the international congress of psychiatrists at Paris, or the meeting of the directing council and sanitary conference of the Pan-American bureau at Ciudad Trujillo. There was another conference which undoubtedly was an important matter to Canada's survival on which we should hear a report at the earliest opportunity; that was the Washington conference of the society of vertebrate palaeontology and the palaeontological society. These are simply a few.
The Budget-Mr. Drew


Some hon. Members:: Oh, oh.


George Alexander Drew: I thought for a moment the Secretary of State for External Affairs (Mr. Pearson) was going to say a word, and I am sure most hon. members will be very anxious to learn what advantage was gained from these meetings, in these critical days.


Lester Bowles Pearson: I was just going to say there were no delegations at those conferences.


George Alexander Drew: Then I feel sure the minister will take the first opportunity to correct the recent statement to that effect. But I will not change in any way the statement that this government has gone conference crazy, and that it could save large sums of money by confining its attention to those conferences which may be expected to advance the interests of Canada and the Canadian people in important fields, where some measurable benefits may be expected. Sometimes it is only by such illustrations as this gathering of chocolate manufacturers and so on that we can see how far this tendency to attend conferences really goes.


An hon. Member:: Well, they have nice trips.


George Alexander Drew: They have very nice trips, but these conferences can be curtailed and brought within reasonable limits. This government can do what any big business would do at the present time in the face of changing economic conditions and the necessary readjustments in its internal activities. Any business of any size in this country, called upon to readjust its internal organization on a scale even remotely approaching what this government is called upon to do, would call in experts to see how they could improve the efficiency, the cost accounting methods, and bring about economies within that structure. For that reason we have pressed for the setting up of a commission to examine the whole business structure of the government; and we shall present another motion in the hope that at this time, confronted with these greatly increased expenditures, the government will take steps which should have been taken long ago and which have been taken with great advantage in other countries in the past few years.
Then, Mr. Speaker, we come to the form of some of the increased taxes. No one is suggesting that there is any such thing as a painless tax. No one is suggesting that the cost of defence can be carried without a very heavy burden being accepted by the people of Canada. But the Minister of Finance (Mr. Abbott) has himself indicated that there are alternative devices which could be employed, and that if the present serious situation continues he is ready to employ

The Budget-Mr. Drew them at some stage. One of the things everyone is finding it extremely difficult to understand is why this government imposed taxes on electrical equipment such as refrigerators, stoves and things of that kind, when there is every reason to encourage the use of these articles, as long as there is an adequate supply of electricity. They reduce the human effort required; they make the hands employed in that work more productive and capable of doing more and other work as well, which they cannot do if they have to use other types of equipment. The very efficiency of this type of equipment is one reason why its use should be encouraged rather than discouraged. Certainly it is not a luxury.
Then we come to the corporation tax. I do not suggest that the government could have avoided large increases in some of these taxes, but what I believe should be emphasized and re-emphasized, is that the imposition of heavy corporation taxes does not relieve the small taxpayer of the payment of taxes simply because they are imposed upon corporations. The sooner everyone in Canada realizes that increased corporation taxes simply mean increased prices the better it will be for all Canadians, and the greater demand there will be for economy.
There is nothing cynical, nothing improper about that. Many of the large companies in Canada making some of the largest actual profits operate on a relatively narrow profit margin. I do not say that applies right across the board, but many companies operate on a relatively narrow percentage margin. If they are to stay in the black-and that is of interest to every Canadian who has insurance, bank deposits and all the other things that base their security on investment in these corporations-then they must pass on taxes of that kind. Therefore it is the little fellow again who pays, and no one should suggest that the public is being relieved of any burden because these taxes are imposed on corporations.
Then we come to the tax I think most objectionable, and which even at this stage I believe the minister would be well advised to withdraw; that is, the increase in the sales tax.
In yesterday's Windsor Daily Star there is a report of a statement made by an official in the United States who is in charge of price control over there; I refer to Mr. DiSalle. While I am not suggesting for one moment that he is in a position to state what Canadians will do or should do, it is not without interest that he has expressed an opinion which is based upon experience in

this field, and with close contact with Canada. In the Windsor Star of yesterday he is quoted as follows:
However, he said, the dominion-
That is, the Dominion of Canada.
-will be obliged to impose direct controls when the full impact of defence buying by the Canadian government hits the economy of the country.
We have been told over and over again that it is hoped that if controls in the United States are a success, the need for similar controls here will be diminished. Mr. Speaker, the greater the success of those controls in the United States, the greater the need for similar controls here. If controls are effective on the other side-and it is most difficult to believe that they will not be substantially successful in view of the men who have been placed in charge of that work-then there would be a highly speculative pressure on supplies in Canada, by those who are trying to buy supplies of that kind in the United States. That is something that has happened before, and it will happen again. Therefore as we see the effort being increased to improve the measures of control which have been established in the United States, it becomes more and more necessary that at least the preliminary steps be taken here to put into effect whatever flexible measures of control or otherwise the government may decide on, as soon as they possibly can.
Let us now examine this increase of 25 per cent in the sales tax. There again we have one of these rather difficult decisions to make. We have the statement by the Minister of Finance that it is not a regressive tax. We have the positive statement by the Minister of Justice (Mr. Garson) that it is a regressive tax. There is no shading between the two. They are both definite. We must therefore make the choice as to which one we think is correct.


Douglas Charles Abbott: What is a regressive tax?


George Alexander Drew: I would assume that the Minister of Finance would know what a regressive tax was. He used the term, and I would assume that he knew what it meant.


Douglas Charles Abbott: I was wondering whether my hon. friend knew.


George Alexander Drew: After all, the Minister of Finance is charged with this responsibility. If he thinks it is not a regressive tax, then for two reasons at least we must recognize the need for impressing him with the effect of a tax of this kind, in the hope that reconsideration may still be given to the position which has been taken. The first is the fact that this

tax has been generally regarded, and with reason, as the tax which most unfairly bears upon the small taxpayer who is least able to bear the burden. Some attempt has been made to create the impression that the sales tax really does not affect the ordinary householder very much. The Minister of Finance explained that it did not affect a long line of foodstuffs and things of that kind. That is quite true, and for a good reason. When so much of the supplies of that kind finds its way to the market direct from the farmer, it would be extremely difficult to impose a sales tax on many of those foods. We see lettuce, celery, tomatoes, apples and food of that kind being sold along the highways. It would be a most difficult tax to apply and therefore it is not applied. But that does not mean for one moment that it does not apply to things that go into the household. More than $100 million on boots and clothes is raised by that tax under the present budget; and most of the other things are things that directly affect the living of the people of this country. It is a tax which should not be imposed in the first place, if it is avoidable; and having been imposed and maintained at 8 per cent for some time, it should certainly not at this time be increased by another 25 per cent, when the people on whom it will bear most heavily are already finding so much difficulty in meeting the high cost of living.
But there is another reason why all of us should examine the effect of this tax, and I would in all earnestness urge the Minister of Finance to reconsider this one tax, no matter what else he does. A committee of this house met last year for many weeks to consider old age pensions. That committee brought in a report which, so far as it goes, will undoubtedly receive the unanimous support of this house. There was not unanimity with regard to its recommendations, because there were those who thought that it should have gone further; but that aspect we can disregard for the moment. There is that report which, so far as it goes, I believe is supported unanimously in this house. It called for increased old age pensions at the age of 70 without a means test.
Contrary to the recommendations or the obvious intention of that committee, it has been proposed by the dominion government that the provinces, in order to meet this obligation, should acquire the right to impose a sales tax up to 3 per cent; that is an indirect tax. That proposal is a break with tradition and requires an amendment to the British
The Budget-Mr. Drew North America Act. I believe that particular tax should not be passed by this house in any event. No matter what can be said for the sales tax imposed by the dominion government on a uniform over-all basis, a sales tax by the provinces should not be adopted as a device for meeting this or similar obligations, for two important reasons.
First of all, there is the fact that it constitutes a serious threat to the uniform living standards of our people. In the second place, it constitutes a serious threat to our constitution itself. Do not let anyone suggest here that, because an - amendment may be approved, this makes it any more satisfactory from a constitutional point of view. This country, with all its difficulties, has carried on extremely well under a basic constitution which was adopted in 1867, when conditions were far different from what they are today. At that time the indirect field was taken exclusively by the dominion government and the provinces were entitled to tax in the direct field. It is true it was not stated that the provinces had that field exclusively. Until 1917, however, it was always accepted as a traditional thing that there would be no invasion by the dominion government of that direct tax field. That acceptance was borne out by the then minister of finance, Sir Thomas White, who expressed his regret that the government should invade a field that was so clearly a provincial one, and who expressed the intention to leave that field as soon as it was possible after the end of the first world war. Whether or not the dominion government could possibly go out of that field is certainly open to real question today. But whether it does or not, let us not get into worse confusion, at a time when we need to settle these tax problems, by getting the provinces into the indirect field and leaving no traditional foundation whatever for our tax system.
When the dominion-provincial conference met in August 1945 and in the succeeding meetings of that conference, it was pointed out that one of the things which should be done at the earliest possible date was for the dominion government and the provincial governments to consider the whole tax structure in Canada with the idea of simplifying it at the dominion, provincial and municipal levels, so that it would bear most evenly and easily upon the people, at the same time clarifying once and for all the taxing rights of the provinces, the municipalities and the dominion government, so that the power of taxation would go hand in hand with the power of administration and legislation. That has not been done, and if

The Budget-Mr. Drew has not been done for one reason and one reason alone, namely, that the dominion government did not carry forward the recommendation that was made at that time. Although it was not done-and nearly six years have passed-I still urge that this subject be tackled now, and a review of our whole tax field be examined with the dominion, the provinces and the municipalities. I know there are those who say that the municipalities are the creatures of the provinces, and that therefore they do not need to sit in on that. I think they should sit in, because, in fact, the provinces were largely the creatures of the municipalities in the first place. It was the early municipalities, settled in different parts of eastern Canada, on the west coast and on the Red river, that laid the foundation of Canada as a nation. They have their traditions and their experience. They can contribute a great deal, because it is in these municipal councils that you find the bedrock of democracy itself.
Certainly with that possibility and with that hope I do not think that this parliament should consider an amendment to the constitution at this time, which would start something that it would be very difficult to unscramble afterwards. This is not the first time that this subject has been considered in this house. It came up before in 1936. Fortunately in 1936 common sense prevailed, and they did not go ahead with this very wrong idea.
One of the things that were emphasized at that time, and one of the things that should be emphasized now, is that these taxes, which would be imposed indirectly'by the provinces if there is an amendment of this kind, would be imposed at the very time when a lot of these other inflationary taxes are going to be encountered. Remember, this is a different tax from the dominion general sales tax. The only similar thing about it is that it is a bad tax and invisible. But it is very different in its impact and in its effect, because it is a tax on the accumulated price of the article. The tax is a tax on the cost of the article itself and on all other taxes that go into it; and they do, because the tax is a tax on the price which is made up of the dominion general sales tax, of the municipal taxes on the factory, on the store, on the taxes paid by those who have shipped and handled the goods, on the income taxes of the company and everything else. All these taxes are wrapped up in the price on which this 3 per cent will be charged. It is a vicious tax and should not be contemplated now or at any other time.
CMr. Drew.]

But what is worse, it is a tax which will divide this country at the very time that we are trying to elevate the living standards across Canada and find ways of assisting those provinces which are not so fortunate as other; in their revenue resources. We would be doing something that would aggravate the difference. As an example, it has been definitely said that the province of Ontario has no intention of imposing this tax. It has been said that some of the other provinces have no intention of imposing this tax. In Prince Edward Island * he voters will not be able to decide on this issue tomorrow, because both parties have said down there that they will not impose it, but this government has given very startling examples of how quickly promises of that kind can be forgotten. Where this tax would be imposed would be in those provinces which already are finding it most difficult. Those provinces which need extra revenue at this time would impose it, and consequently the cost of necessary things for the home would be higher than they would be in the provinces where the living standards are already higher.
Then there is another feature which has not been mentioned so far as I know in the discussion of the subject, and which I think does need to be borne in mind. It is this. This can be made a most effective barrier to trade between the provinces; not only is there the fact that it would raise difficulties as between provinces, but there is a device for which this tax could be employed to differentiate between products of one province and another. A tax could be imposed by a provincial government, which would impose this sales tax on articles coming into the province, and specifically state that the tax would not apply to articles made in that province. That would create a most unfortunate situation, and one which would lead not only to friction between the provinces but also to something which would approach the evasion of taxes which you sometimes see on the international border. I mention that for this reason. This tax is made in fact a condition of bringing in old age pensions. In a statement made in this city on April 21, as reported by the Ottawa Evening Citizen, the Minister of National Health and Welfare (Mr. Martin) said that, as soon as agreement was reached in regard to this amendment which would provide for the imposition of this indirect tax in the provinces, the government hoped to go ahead with old age pensions. Now, Mr. Speaker-


Mr. Marlin:: I just heard what my hon. friend said. If he said, as I understood it, that the

old age pension program depended upon the three per cent proposal he is entirely at fault, in error.


George Alexander Drew: If I am at fault, I am only at fault in relying on the Citizen, and I have found it very reliable. This is what the minister is quoted as saying:
As soon as agreement is reached the federal government will lose no time in presenting to parliament a resolution requesting the United Kingdom parliament to pass the old age pensions amendment.
Now, the only old age pensions amendment that we are really closely concerned about, or that the United Kingdom parliament will be concerned about, is an amendment to the constitution which would permit the imposition of this tax.


Douglas Charles Abbott: No.


George Alexander Drew: Of course it is. There is no question about the other, because agreement is already reached on the old age pensions. It is agreement on the amendment which will permit the imposition of this tax that is still creating difficulty.


Stuart Sinclair Garson: Mr. Speaker, I think my hon. friend, the leader of the opposition, is anxious to be accurate in the statement that he is making to the house now. I am sure that if he will examine the record of the offer that was made by the dominion government to the provincial governments at the conference, and all of the correspondence which has taken place since, he will see that at all times there has been a very clear understanding that the old age pensions amendment is not contingent upon the sales tax amendment, and that the sales tax amendment is not contingent upon the old age pensions amendment.


George Alexander Drew: Then, Mr. Speaker, I would ask the Minister of Justice if he will state now unequivocally that the old age pensions can proceed without any regard to the sales tax.


Stuart Sinclair Garson: Certainly.


Douglas Charles Abbott: Of course.


Stuart Sinclair Garson: It has never been any other way.


George Alexander Drew: Yes, it is.


Stuart Sinclair Garson: No.


George Alexander Drew: I am making the speech.


An hon. Member:: You have had an answer.


George Alexander Drew: I take the answer, and I accept the answer; and having accepted the answer I now say that I hope there will be no further consideration given to the introduction of a tax which is not necessary and is vicious and improper and would be divisive to the whole of Canada.
The Budget-Mr. Drew


An hon. Member:: Get back to the script.


George Alexander Drew: We have now a very hopeful answer, because the problem that has been raised, the real problem raised, was the problem in regard to this sales tax. The provinces have not at any time raised any question about wanting to get ahead with pensions at seventy without a means test. And I hope that without further delay everything now will be cleared up to get an amendment before this house and before provincial legislatures so that people who need this pension will get it at the earliest possible date.
And I hope, what is more, that, in view of the statement now made by the Minister of Justice (Mr. Garson), the Minister of Finance (Mr. Abbott) will either introduce a motion into this budget for this increased old age pension or immediately bring in a supplementary estimate which will cover it. No matter who else may be misled by the actions of this government, there is one group of people they must not mislead, and that is the old people of this country. Those people are the people who have not still the working power to adjust their living conditions, to cope with the events of these serious days.


Douglas Charles Abbott: Yes, yes.


George Alexander Drew: And, far from this being the time when no one should consider dealing with old age pensions, because of national defence, this is the time above all others when the program of old age pensions approved by the committee last year should be brought into effect with the least possible delay.


Douglas Charles Abbott: Yes, yes.


George Alexander Drew: Certainly these pensions, promised by this government in 1945, should not wait much longer in 1951. These pensions should be paid; because, however necessary they were before, they become more necessary every day now, when the cost of living goes up, and when these people are, according to official reports, in want and distress because of the inadequacy of the pension they are receiving.
Do not let anyone say that this is a tax for old people; do not let anyone say that this is an appeal to emotions only. The old people are the people who deserve the most, and they do not deserve the sarcastic comments of the Minister of Finance such as he made just now.


Douglas Charles Abbott: Mr. Speaker, I must really object. I have made no sarcastic comments. I have made no comments at all. Later on in this debate I expect to put him right on

The Budget-Mr. Drew the assertion that the two amendments were tied together. That is all I have to say.


George Alexander Drew: I have heard these comments of the Minister of Finance right here this afternoon. My hearing is good.


Douglas Charles Abbott: My hon. friend is making an assertion unfounded in fact.


George Alexander Drew: Mr. Speaker-


An hon. Member:: He is not snickering now.


George Alexander Drew: Mr. Speaker, there is one particular reason above all others why this should be proceeded with, and without delay -and we now have an indication that it can be done without delay, because we have had the clear and unequivocal statement of the Minister of Justice that they do not need to impose this vicious tax in order to provide money for this.


Stuart Sinclair Garson: Now, Mr. Speaker-


Douglas Charles Abbott: Oh, let it go.


Stuart Sinclair Garson: Mr. Speaker, if my hon.
friend will identify the author of the inaccurate statement which he has attributed to one of the ministers of the government-if he attributed it to me I would like to correct it.


George Alexander Drew: Mr. Speaker, I was just referring to the statement of the Minister of Justice, which I hope is accurate, and that is that he has made an unequivocal statement that it is not necessary to impose this vicious tax in order to give old age pensioners the money they desire.


Mr, Garson:: No; on a point of order, I
did not make any such statement, and my hon. friend is-


George Alexander Drew: What!


Stuart Sinclair Garson: What I said was this, if my
hon. friend would listen-


George Alexander Drew: Mr. Speaker, I will let Hansard speak for itself.


Mr. Gardiner:: A question of privilege.


George Alexander Drew: And that is not a point of
order.


Stuart Sinclair Garson: Mr. Speaker-


Mr. Speaker:: The leader of the opposition has the floor, and a question can be asked only with his permission.


Some hon. Members:: Order.


Stuart Sinclair Garson: On a point of order.


George Alexander Drew: I have the floor.


Stuart Sinclair Garson: On a point of order, Mr. Speaker-


George Alexander Drew: You heard Mr. Speaker say
that I had the floor.


Mr. Speaker:: The Minister of Justice is
now rising to a question of privilege-not a point of order.


Stuart Sinclair Garson: Mr. Speaker, the leader of
the opposition has attributed to me a statement which I have not made.


Mr. Speaker:: Then the minister should
rise on a question of privilege.


George Alexander Drew: That is right.


Stuart Sinclair Garson: My point of privilege is this, that the point I made a few moments ago was that from the very beginning the federal government offered to the provincial governments at this conference-


Some hon. Members:: Order.


George Alexander Drew: No, no, Mr. Speaker-


Mr. Speaker:: When the Minister of Justice is speaking on a question of privilege, he should be allowed to do so, but he should state his question as briefly as possible.


Stuart Sinclair Garson: Mr. Speaker, my point of
privilege is this-


An hon. Member:: The third time.


Douglas Charles Abbott: Listen, and you will know
what it is.


An hon. Member:: The Minister of Finance will deal with it.


Stuart Sinclair Garson: -that the statement which my hon. friend the leader of the opposition has attributed to me, to the effect that the sales tax amendment is not necessary to raise revenue, is not correct. It may be necessary on the part-


Some hon. Members:: No, no.


Mr. Speaker:: Order; I do not think the
minister should be allowed to amplify it at this time. He cannot debate it at this time.


Some hon. Members:: Sit down.


Mr. Speaker:: I do not think the Minister
of Justice should take this opportunity to debate it. He will have an opportunity later on to do that.


Stuart Sinclair Garson: Mr. Speaker, I do not wish
to debate it-


George Alexander Drew: Mr. Speaker, I would point out that Hansard will show what the minister said; and it can stand there, now that he has raised the point.


Stuart Sinclair Garson: Well, I make the point of privilege that I have heard and deny the statements now attributed to me.


Murdo William Martin: Mr. Speaker,-


An hon. Member:: Here is another one.


Mr. Speaker:: The Minister of National Health and Welfare has the floor.


Murdo William Martin: The hon. member was quoting from a statement I made. I know he would not knowingly misrepresent it. Would he afford me the opportunity to point out what was said?


George Alexander Drew: No, I have accepted the statement of the Minister of Justice in regard to what he said.


Murdo William Martin: No; I do not wish to interrupt-


George Alexander Drew: Mr. Speaker, I do not wish to rise while you are on your feet, sir, but I wish to point out that I made a statement in regard to agreements under consideration, and the reference was to a report in the paper which referred to two agreements. The minister made a statement and I accepted that statement, and said so-the statement of the Minister of Justice. I accepted it, and Hansard will show what was said. Therefore there is no question of privilege arising.


Murdo William Martin: I am sure there is. I do not wish to get into an argument with my hon. friend, but I wish to point out that he referred to a statement that I had made in answer to a question put to me by one of the gentlemen of the press. He went on to say that I had stated that unless the three per cent amendment was also admitted we could not possibly have an old age pensions measure. It is true that I take issue with that statement. Having quoted that statement I think that, in fairness to me, either I should be allowed to say what I said or my hon. friend should quote me in extenso. It is only one line, but I simply said it would be convenient to put the pensions and the sales tax amendments through at the same time, but if agreement were possible on the old age pensions and not on the sales tax, the pension amendment would not be held up.


George Alexander Drew: Mr. Speaker, you will notice that I accepted that statement. I then accepted the more emphatic statement of the Minister of Justice (Mr. Garson). Now the Minister of Justice is seeking to qualify the statement which the Minister of National Health and Welfare (Mr. Martin) appears so anxious to have on the record. So I do hope the two ministers will clarify the position between the two of them.


Stuart Sinclair Garson: On a question of privilege, I repudiate the suggestion that there is any attempt to qualify the remarks of the
The Budget-Mr. Drew Minister of National Health and Welfare because my remarks were not relevant to his statement.


Douglas Charles Abbott: Let us get on with the budget debate. What has old age pensions got to do with it?


George Alexander Drew: Mr. Speaker, that comment of the Minister of Finance should not pass unchallenged. He says, "What has old age pensions got to do with it?" Old age pensions have a great deal to do with this budget because one of the places in which increased old age pensions should be provided for is in this budget, if the government has not its tongue in its cheek in regard to pensions at this time.


Douglas Charles Abbott: I said that was to be a contributory old age pensions plan.


George Alexander Drew: This budget will in itself create pressures that did not exist before it was introduced. It is perfectly obvious, however, that once introduced and the taxes applied, as they automatically are applied under our tradition at the time of the announcement of the budget itself, no matter how wrong some of these taxes may have been it must be recognized that they cannot be taken off at this moment and that we must put up with some of them until a later date. But this increase of 25 per cent in the sales tax can be stopped as quickly as it was put on. I earnestly urge upon the Minister of Finance consideration of the removal of the increase, no matter what else he may believe could be done to meet this situation.
The people of this country want a feeling of confidence; they want a feeling of security; they want a feeling that they can meet their daily needs in the days ahead in order to have the spirit that we need in this country, to meet all the problems of defence which lie ahead. It is because of that, that I once again urge the Minister of Finance to reconsider his decision on this 25 per cent increase in the sales tax and to announce its withdrawal in the interests of production, as well as in the interests of the people of Canada who need some restraint on the rising cost of living at this time.


Douglas Charles Abbott: Mr. Speaker, I had not really intended to take any more time of the house in this budget debate because, unlike the leader of the opposition (Mr. Drew), I endeavour to avoid repetition as much as possible. I shall try not to take quite as much time now as he has taken to elicit the points he wanted.


George Alexander Drew: Or as you took before.


Douglas Charles Abbott: That is quite right; I took an hour and fifteen or twenty minutes to outline


Donald Methuen Fleming: Might I ask the minister a question?


Douglas Charles Abbott: Certainly.


Donald Methuen Fleming: If that purpose is so laudable -and I think we would all agree-why does the minister not consciously budget for a surplus?


Douglas Charles Abbott: I have budgeted in every year for at least a modest surplus. Of course in the last two years, with expenditures of $3 billion plus, an estimated surplus of $40

million or $50 million is in effect budgeting for a balance. In 1948, at the peak of the post-war inflation, I budgeted for a very substantial surplus, as the house will recall, and made virtually no tax reductions. I am stating the position. I am stating that under conditions of high employment and increasing gross national production, such as we have enjoyed) during the last four or five years, it is inevitable that revenues will go up. So much then for this alleged deliberate underestimating of revenues.
My hon. friend made some reference to attempts to cut expenditure, and he indulged in his usual generalities that there were all kinds of places the government could cut expenditure if it would just go about it. I speak from considerable experience on that subject. I am not going to repeat what I said in my budget speech about the deliberate, conscious and, I think, effective effort at reducing expenditures this year. Something has been said about the reduction in services in the post office, that it was initiated as a sort of spectacular thing which everybody would see, and would be evidence that the government was reducing expenditures. As I think someone pointed out the other day, the post office is the largest employer of civil servants in the government service.
During the war we elirhinated the second delivery a day in urban areas. It seemed to me that was one of these frills that one might eliminate at a time like this. The Post Office Department was agreeable and that was done. A storm has been raised about it. I have not heard any member in the opposition suggest that it was a wise thing to do. My good friend, the hon. member for Lake Centre (Mr. Diefenbaker), who is one of the most vehement critics of extravagance, said: Oh well, you should not have eliminated this postal service. Let me say, Mr. Speaker, that there is only one way to reduce government expenditure, and that is by eliminating functions or activities. Out of our total budget of $3,700 million odd, if you eliminate defence transfer payments, old age pensions, payments to veterans, interest on the public debt, and so on-, there remains about $500 million that is paid out for salaries and wages, purchase of materials and all other government services.
That is the field in which you have to effect your reductions. That includes all construction activities aside of course from defence, and it is in that field of $500 million that we achieved this year a reduction from last year of some $35 million notwithstanding the increase in costs through civil servants' salaries and all the other things that go with it. Therefore I am prepared
The Budget-Mr. Abbott to say, speaking with full knowledge of what I am saying, that there has been a real and successful effort to cut down on less essential government expenditure. If any hon. member opposite who wants any other service eliminated will make a specific suggestion such as the hon. member for Royal (Mr. Brooks) made the other day, that we eliminate some lighthouses on the Saint John river, I can assure him that these suggestions will receive the most earnest and careful consideration.


Mr. Brooks:: Mr. Speaker, I should like to say that it was not only the Saint John river. I said that investigations should be made all across Canada for that purpose.


Douglas Charles Abbott: We will certainly be very glad to look into the matter to see if we can dispense with some of these services, and not only on the Saint John river. I am not going to discuss this interesting thought about flexible price controls that my hon. friend has put forward. He is very careful of course to refrain- from any mention of wage controls. I noticed yesterday, when the hon, member for Temiscouata (Mr. Pouliot) was making his excellent speech, that when- he -asked my friend, the hon. member for Vancouver-Quadra (Mr. Green), if he would be in favour of imposing wage controls there was no response.


Mr. Green:: I did not answer any of his questions.


Douglas Charles Abbott: That is quite right. I have already made my views pretty clear as to why I do not think the immediate imposition of over-all price, wage and other controls is desirable at this time. I must say it gives me a certain amount of quiet amusement to see the leader of the good old Conservative party posing as an advocate of a controlled economy, but I suppose I can be forgiven that.


George Alexander Drew: Mr. Speaker, I would point out that the Minister of Finance will find in Hansard that what I was referring to was a statement of the Minister of Trade and Commerce (Mr. Howe) in which he had referred to price controls, and price controls exclusively. I was pointing out that I hoped he knew what he had promised, and that he would do it.


Douglas Charles Abbott: I was just referring to my
hon. friend's sort of general advocacy of controls as a cure for the inflationary situation in which we now find ourselves. As to the general criticisms of the budget, let me say at once that none of them came to me as any surprise. I knew perfectly well that ringing speeches would be made in the house about the evils of the general sales tax. I remember that ten years ago I had occasion

The Budget-Mr. Abbott in the house, in connection with another matter, to quote something I had read, that some people who think they are thinking are only rearranging their prejudices. I think that applies to a good deal of the criticism I have heard here and elsewhere about the so-called general sales tax in our tax structure today. I dealt with that matter at some length in my budget speech, and I am not going to repeat now what I said. I will say that anybody who stands up in this house and says that we should not increase the sales tax really should tell me some place, other than liquor, where I can get the extra revenue.


William Joseph Browne: Excess
profits tax.


Douglas Charles Abbott: I realize the political advantage of suggesting increased taxes on liquor.
I understand these things just as well as anybody else, but I gave the reasons why I thought that at this time it was not either desirable or productive to increase the tax on liquor, which was increased last September. I am sure that the leader of the opposition's successor, Mr. Frost, will agree entirely with the stand that I have taken on that point. In fact he has publicly said so.
Finally the hon. member made some reference to the desirability of increased production. Before I speak about that, may I add that I am not going to deal with the criticism of the tax imposed on refrigerators, stoves and washing machines. In my budget speech I stated why I felt it was necessary to put a tax on these articles at this time, and I am not going to repeat the reasons now. We have to remember that these moneys have to be raised from the people of Canada. In the situation we are in now I do not consider that, with the tremendously increased consumption of these particular articles, it is unfair or unjust to impose a special tax at this time. Other than that, I do not propose to add to what I said in my budget speech.
As to the question of increased production, I* think that is really the key to the solution, so far as a solution can be found domestically, of the problem of the inflationary forces that exist today. I have said before and I say again that I do not think anyone in this country-and that goes for all of us-should contemplate working less than he does now. Speaking generally I believe we should all recognize that whatever hours we are working now we should continue to work. I am not suggesting that wage adjustments should not be made; but any attempt to shorten the hours we work, with rare exceptions where greater efficiency might result, must cause some diminution in production and additional demands for manpower. So I really feel that

every Canadian should seriously consider whether, conditions being as they are today, he would be justified in asking that he work shorter hours. I am profoundly convinced of that, and I am glad of this opportunity to voice my views.
As far as the budget itself is concerned, I was faced with the problem of an outgo of some $3,700 million to $3,800 million. As I said in my budget speech, I felt that we should take in at least that amount, and in consultation with my colleagues I endeavoured to spread the burden as fairly and equitably as possible. I am not so conceited as to believe that I have omniscience, or that it might not be possible to make some improvements, but I believe that on balance the budget, while a tough one, is fair; and I am satisfied to leave the verdict on that with this house.


Mr. Donald Smith (Queens-Shelburne):: Mr. Speaker, I shall not detain the house very long. I do desire, however, to make my contribution to this debate; and since this is the first budget debate in which I have taken part I should like to take advantage of this opportunity to offer my sincere congratulations to the Minister of Finance (Mr. Abbott), not only on bringing us this budget but on those he has brought down since he has been in that high 'office. I know when I make this statement I am saying what is in the minds of the people of my constituency.
I should like to remind hon. members of the high standard that has been set by other finance ministers, particularly those from, my own province of Nova Scotia. One of the earlier finance ministers in our history was Right Hon. W. S. Fielding, who by the way represented the riding which I am now trying to represent. Mr. Fielding was minister of finance in Sir Wilfrid Laurier's cabinet. Then I need only mention the name of Right Hon. J. L. Ilsley to further remind hon. members of the high calibre of the ministers who have come from Nova Scotia, and to indicate the high standard which is being maintained by the present minister.
I am sure it was most pleasing to my people to note that the fishing industry has been given some consideration in the budget this year. I refer in particular to the free entry of diesel engines, which will be of some assistance to those fishermen who use larger boats in which diesel engines permit more economical operation. Then the free entry of nets and lines of any material, while it may not seem like much help, will be of real assistance to our fishermen in Nova Scotia, so I am sure they will all appreciate what has been done for them in this budget.

In recent budget speeches documents have been quoted indicating the rapid growth of our economy. I believe it is only natural that some parts of Canada should have been in a position to participate in that growth to a greater extent than others. The rate of such growth depends on many factors, not the least of which is the presence of natural resources of one kind or another. Hon. members of this house who had the privilege recently of visiting northern Manitoba I am sure came back with a much greater realization of the importance of those natural resources. Many years ago men of courage and vision made a great contribution to the economy of this nation when the presence of high grade ore containing many metals was discovered. As a result of these discoveries, at Flin Flon today, for example, over 2,500 men are employed in mine and smelter, bringing out of the ground and refining some $40 million worth of precious and base metals, of which I believe today the latter are of more real significance than the former, particularly in terms of national defence.
When we think of natural resources we should also keep in mind the importance to the development of Canada of the gas and oil discoveries in Alberta and elsewhere. I believe we should consider the mineral developments in British Columbia, northern Ontario, Quebec and Labrador, whose iron ore deposits will play a most important part in our industrial development. If we had read or heard of a nation whose resources had been developed during the last ten years or so as have those of Canada, and which had made the economic and political progress this nation has made, I am sure we would be of the opinion that there was a nation with a future. It seems to me that we in Canada do not quite appreciate the future that lies ahead. There appears to be a lack of understanding of our potentialities. Discussions with students of history, economists, engineers and others who have given some thought to this matter can only lead one to the opinion that in the not too distant future Canada will not only be the leader of the middle powers, as she is now, but the leading country of the world; and it is a fact that even now, because of the ability of her leaders, Canada is giving leadership to the democratic world.
That causes me to say this, that we should not, through narrow thinking, fail to do those things which would promote this growth, or do those things which would hinder this great development. This is a time for vision, for faith and for hard work, as was so ably put the other day by the hon.
The Budget-Mr. D. Smith member for Oxford (Mr. Murray). To those who were not in the house that evening, and have not read that address, I would suggest that it is quite worth while.
I believe the construction of the St. Lawrence waterway will be an important step in our national development, and I believe we should get along with it with all speed. There are those from the maritimes who hold the view that this project will harm the economy of those provinces. I do not hold that view; I agree with the hon. member for Inverness-Richmond (Mr. Carroll) that it can be a real benefit to the industrial and economic life of the maritimes. As someone has said, prosperity is an atomic reaction, by which all links of the chain must be affected. Our ports of Saint John and Halifax will not only hold the business they now have; following the construction of this inland waterway I believe we can look forward to a great expansion of port activity coincident with our national growth. As has been pointed out, the development of the St. Lawrence waterway can provide the means for an expansion of the markets for Nova Scotia coal by placing it on a more competitive basis with Pennsylvania and Virginia coal, the producers of which in the past have opposed the St. Lawrence waterway because of their fear of the competition of Nova Scotia coal. In view of the present great need for power, because of its relation to national defence, and because of its importance to national expansion, I am prepared to support the St. Lawrence waterway.
As far as possible I believe this waterway should be self-liquidating. I believe the users of the power should pay for the power development, and those who use the canals should pay for them by means of tolls. At the same time the maritimes should insist that such developments as the Passama-quoddy power project, the St. Mary's project and others be vigorously explored. Without such power development in the maritimes we shall not be in a position to attract desired industries. With it, industries would naturally be attracted to the maritimes by the cheap power which would be thereby produced. I think that we in the maritimes should also insist that there should be no reduction in expenditures for public works and aids to navigation, things which are so essential to the fishing industry which I believe is on the threshold of greater expansion.
I further believe that the subsidy on feed grains from the west should certainly be continued. I also believe that, if the west give their support to this development, a project such as the South Saskatchewan river project should receive full consideration.

The Budget-Mr. D. Smith
Transportation costs have been held to be a factor responsible for a lack of industrial development in the maritimes. It is hoped that action will soon be taken to implement the recommendation of the royal commission so that the handicap of unjust freight rates will no longer be a factor. I think that we in the maritimes are actually prone to forget that, having the Atlantic on our doorstep, with all-year-round harbours, we have a position that is helpful with regard to exports. It was because of this favourable factor that the newsprint industry in Nova Scotia has been such a great success.
We all know that in order to develop industries in Nova Scotia or anywhere else risk capital must be provided. Past experiences have demonstrated the success with which capital has been invested in Nova Scotia industries. Reference has been made previously in this debate to the industry in Truro operated by Stanfield's mills. I could also mention the Moirs factory in Halifax. Stanfield's and Moirs are names that are known from coast to coast. Then there is the Simms company in New Brunswick which makes brushes and-as we certainly now know-brooms. It is a firm which has made quite a success. Those are just a few illustrations to show the people in this country that this can be done.
I do not expect government-owned and operated industries to be set up in our province. That is the socialist way, with its regimentation and its bureaucratic mismanagement. Nova Scotians should do their own encouraging of capital to come into the province. Capital was encouraged to come into my own constituency where the Mersey Paper Company, Limited, has operated for over 20 years. This newsprint industry changed completely the economic life of my home town and county, and it has had a great effect on the economy of the whole province.
Anyone who cries out that we are going to the dogs in Nova Scotia should look about him before making such a statement. Let him take a look at the lumber industry. Let him take a look at the fishing fleet: not only the number but the size of the boats has increased a great deal during the last two years. There are new plants established all over the province, some of them small and some of them extremely large. The herring industry is a new one in our province; herring are cured and exported to the United States. It is an industry which we did not have until just a few years ago. The swordfishing industry is one that is expanding on our coast. The incomes of the fishermen may not be equal to those of people engaged in

other industries, but for the fisherman who is ambitious and willing to work and take the necessary risks, his earnings ' are sufficient to make his way of life a happy one.
Notwithstanding the fact that Nova Scotia is third among all the provinces in dollar value of defence contracts awarded, I believe that we should, however, receive more preference than we do at present. I should like to give one example. In the town of Shelburne there is a company known as Ven-Rez Products, Limited, specializing in classroom furniture and office furniture. That is a factory that was set up after the war by two young veterans. Their product is of the highest quality, and has given every satisfaction. They have successfully developed a market for their product not only in the maritimes but in other provinces. Because of their insistence on maintaining quality they so far have been unable to meet price competition when tendering on defence orders, although the difference in quotations has been very little indeed in some instances. It seems to me that in cases of companies like that, there should be some system of allocation so that they could participate in some of these orders.
I should now like to say a few words in connection with refits and repairs to naval ships. During the last war a yard in my home town of Liverpool, known as Thompson Brothers, enjoyed the distinction of being one of the most important bases in the east for the refitting of minesweepers, corvettes and other naval ships. A large and well-equipped plant was built up, the full peacetime use of which has not been found possible. A certain amount of this kind of work has been carried on, as well as the manufacturing of oil burners and oil tanks. But with the steel situation as it is, the latter has had to be severely curtailed.
In recent months one naval minesweeper was refitted on a lowest-tender basis. This demonstrated the ability of this yard1 to do this work economically, quickly and well. A recent return, in answer to an inquiry of mine, reveals that 34 such ships are being repurchased from civilian owners; and such ships will no doubt require work done on them. However, Mr. Speaker, it will be considered unfair to the maritimes if this type of defence work is undertaken in those provinces already obtaining such a large proportion of defence orders. I would therefore urge that every consideration be given to this and olher Nova Scotia yards, as a

demonstration of the government's desire to decentralize defence industry wherever practical and possible.


Mr. G. M. Ferrie (Mackenzie):: Mr. Speaker, I wish to say how pleased I am with the budget. It does not do all I would wish it to do, and I will have something to say about that matter later. All those on my left are doing just exactly what they did a little over a year ago, crying: Doom, doom, doom; our trade is gone; farm products will be worth nothing and there will be a great mass of unemployment. The situation has now turned out to be just the reverse.
Here and now I wish to say that in my opinion there is no inflation. A third of the people, who were slaves to society-the farmers and the fishermen-are now getting a fair share of the economy of the country. Why do I say this? The farmer or the fisherman -and there are both in my riding-takes his product to the market and the buyer tells him what he will give him for it. Every other industry tells the consumer what he will pay for the product. Very seldom does the fisherman or the farmer have a seller's market.
This is the only time since 1929 that the farmer has had a fair price for his products. Some of these prices may seem to the people to be out of line; but when you consider the prices that were paid to the producer in 1932, you can readily see why we have such a feeling amongst the people that there is an inflation.
Let us take a few of the basic commodities and compare their prices as of 1932 and 1951; but before going into the figures, I should like to state that in the United States of America, in February, the government there set the retail price of beef at the highest price between December 15,	1950, and
January 15, 1951; and that price is still holding good. That price controlled our market in Canada. Prime beef, at that time, was 58 cents to 61 cents a pound by the carcass; that is for prime beef in the United States. We seldom have that class of beef to ship out of this country. The beef that we generally ship out they call good, and down there it was bringing 55 cents to 57 cents a pound for the whole carcass. That means our red ribbon beef. What we call the blue was 52J cents to 58 cents, and the common was 48 cents to 51 cents. I wish to bring to the notice of the house that this was certainly a control put on all animal products except pork, because the price of veal was set and the price of lamb was set at the same time in the same way.
The Budget-Mr. Ferrie
The reason that the price of pork was not set was that there is an act in the United States which states that no control may be put on unless the price of a farm product is up to parity, and at this time pork was not up to parity, and it has not reached it yet. We have beef products under control as I have just stated. We have hides under a control; we have butter and milk under control.
The leader of the C.C.F. party said that they have been asking for controls ever since 1948. He also said that he wanted to have a roll-back in prices. Does he want a rollback in prices of foodstuffs? To what year? Surely he does not want to go back to any time in the 1930's, for instance, when all the farmers in Canada were going behind. Maybe those in eastern Canada were not going behind so much as those in western Canada; but the whole farming population was in distress during that period. Let us take for instance the difference between 1932 farm commodity prices and those of 1951. Let us begin with eggs. The wholesale price of eggs in February 1932 in the west was 9 cents a dozen. In February, 1951, the wholesale price was 35 cents a dozen in the west. In 1932 hogs were $3.08 a hundred. Today they are $22.50, a rise of 730 per cent. For the same period the wholesale prices of other commodities were as follows. I am not going to put the whole list in. I shall give a few of the outstanding ones. In February, 1932, butcher steers were worth $3.22 a hundred. In February, 1951, they were worth 29 cents a pound, making an over-all increase of 900 per cent. Lambs of 100 pounds were worth $3.64. Today they are worth 32 cents a pound, making an increase of 879 per cent. Here is an outstanding example, and I hope that those people who are looking for controls will think a little bit about it. Let us compare wool with lamb. In 1932 wool was 7 cents a pound and I should like to ask any hon. member if he would like to raise sheep to receive 7 cents a pound for wool. Today wool is worth $1 plus a pound, making an increase of 1,420 per cent. I would ask those people who are advocating controls to take a look at what happened not only in 1932 but in 1935 to see how the farmer was progressing and to see who was getting the benefit.
It is well that we understand that farming is still Canada's greatest basic industry and that if we Canadians are to continue to enjoy an over-all level of prosperity we must guarantee to the farmer not only price stability but economic price parity with all other industries. However, such guarantees, in the light of past experience with tariffs and customs regulations to protect the manufacturer and industrial worker, high prices

The Budget-Mr. Ferrie and wages, can only be effective by guaranteed floor prices and subsidies, when necessary.
Canadian agriculture never did, until recently, receive and enjoy price equality with other industries and workers, having to sell at world price levels while buying in a highly protected market, where wages and prices were far above the average world level. It is only through everlasting and nation-wide co-operation, including the government, that the present high level of economic equality can be maintained for agriculture.
We have been able, through the past eight years, by good salesmanship on the part of our trade and commerce and agricultural departments, to market all our surplus farm products, with only one small exception, namely, eggs, at the highest general price level ever received by the Canadian farmer.
But that may not always be, and that is when stabilized prices are needed, if the whole broad Canadian economy is not to suffer a serious setback.
Our experience during the war years has clearly demonstrated the value of subsidies and floor prices. They have given to agriculture a degree of economic stability never before enjoyed by the Canadian farmer, or perhaps by any other group of farmers in the world, and every man, woman and child in this nation of ours has benefited by that stability.
With all our great gold, iron, copper, zinc and other minerals, with our vast oil resources, with our extensive industrial and manufacturing industries, farming is still the greatest of them all and without agriculture the others would be pretty weak and wobbly. There is one outstanding fundamental, which not only applies to the army but also applies to the industrial worker-the army travels on its stomach and so does every other individual.
Why is farming so healthy and has been for the past eight years? Largely because our national government gave ear to advice and accepted assistance from our grain pools and farm organizations generally, who have made sound recommendations, to which, in most cases, our government [DOT] has been agreeable.
In the view of some people, our farm prices have not, during the war and post-war years, been high enough, while another set of Canadians have protested that the prices of farm products at the consumer level have been too high. I wish to say here again that unless the farmer is prosperous and is making a fair profit nobody else has a good standard of living.
Mr. Speaker, let me say that there is only one way that you can reach an ideal in this
[Mr. Ferried
world, and that is to work toward it. There are two things, I think, that the people of this country are more interested in than anything else. The first is peace and the second is to get rid of communism.
Both these can be accomplished if the working people of Canada will put their shoulder to the wheel. This, in my opinion, is a wonderful opportunity for the union leaders of Canada to come forward and say to the people and to their government, "While this crisis is on, which affects our homes and every one of us, we will work fifty hours a week, for the same rate of pay, and we will raise the production of this country beyond anything that has ever been seen in our history."
This is the kind of patriotic spirit we need in the leaders of all our labour and agricultural organizations and all the people involved. In this way we can have our guns and also our butter. And I am sure the people of Canada would be only too willing, after the crisis is over, to say that there will be a forty-hour week across the depth and the breadth of the country.
I want to say to the member for Rosetown-Biggar (Mr. Coldwell), the leader of the C.C.F. party, that I cannot understand why he, as a representative of the farm population of western Canada, would want for one minute to have controls imposed on his farmers. I want to emphasize this point to him, that the first to suffer under controls is the farming population.
I will give you just one illustration, and I think he should do some real studying. The Minister of Trade and Commerce (Mr. Howe) made a statement in this house on control of the price of hides. How much has this control cost the livestock producer of Canada? When he is through figuring that out, I think he will forget, or want to forget, all about controls.
I would also like to bring to the attention of the C.C.F. party that controls may be just around the corner but no one who values his liberty will seek to advance that evil day. Workers and trade unions should be particularly concerned to avert what is at least a public misfortune and what could prove to be a calamity, for price controls are inseparable from wage controls and from that freezing of employment which is the same as what in other climes is called slave labour.
The hon. member for Lanark (Mr. Blair) made a good speech the other day with regard to the dairy cow and butter, but I would like to bring to his attention and that of the house that the dairy cow has kept pace with

the increase in population. This country has made wonderful strides in dairying since 1915. I should like to place on record the following figures showing the advancement in each province, the millions of pounds of butter which have been produced in that
The Budget-Mr. Ferrie period, 1915 to 1950, a table of which I will hand to Hansard, if I may.


Some hon. Members:: Agreed.


Stanley Howard Knowles: Where is it from?


Gladstone Mansfield Ferrie: The Budget-Mr. Ferrie agricultural production, has the secondary objective of the development of electrical energy.
This would give us one real city, the city of Saskatoon, which would be able to develop light industries and would take care of a lot of ore from the north, if the city has cheap power. It would help to cheapen all the power to the farms all through the province, and thus bring down the cost of production.
There is $1 million to be spent this year. Some people would think that this sum is small considering the total cost but, as every reasonable thinking person would know, ground work must be completed first. This is not costly work but it is doubtful if more could be accomplished in one year than the negotiating and the laying out of this large project. The job started will increase at a faster rate when heavy construction will have to be done.
While the spending of large sums of money for defence is necessary, the development of the country, with a corresponding increase of wealth and people, must also be undertaken.
Mr. Speaker, I said in the first part of this speech that I am pleased with the budget, but it does not do all that I would like to see done. There is no provision made in the budget for relief to local self-government. This sales tax attacks the municipalities, who are not profit-making corporations, in the same way as it attacks profit-making corporations.
The municipalities-the government of the country just the same as the federal government-are rendering service to the people, doing a lot of development work and carrying a lot of social services, which are rendered directly to the individual. If it is impossible to take the sales tax off such things as the machinery bought by the municipalities, then the government should give a grant in lieu of this tax to every municipality in Canada of 1,000 inhabitants or more.
I give you one illustration. A municipality would buy a caterpillar tractor, a bulldozer and a hydraulic scraper, which would cost from $15,000 to $20,000. This tax would add to the cost another $1,500 to $2,000. There is no doubt in my mind that if there are any bodies in this country which need relief from the heavy burdens they are shouldering they are the municipalities of Canada.
In closing, I would say that I would like to see more done for the youth of our country. Youth is the foundation of our country and our greatest asset. People will have to have food, and more food, to the end of time, and youth should be trained to realize that they should stay on the land. But capital must be found whereby youth can establish itself. In


my opinion, there is no reason why the facilities of the Veterans Land Act cannot be carried into civilian life, to the benefit of the whole country and the world.


Mr. Auguste Maltais (Charlevoix):: Mr. Speaker, it was not my intention to take part in this debate, but after listening to the excellent speech by the hon. member for Saguenay (Mr. Brisson) in which he advocated the need for a railroad on the north shore, I consider it my duty to give him some support. As there has been a ruling that texts should not be used in the House of Commons I shall have to be brief as I have no text. However, I shall continue my remarks in the French language.
(Translation):
Mr. Speaker, the request made last night in this house by the hon. member for Saguenay (Mr. Brisson) is not new, since it dates back to 1916. That was the dream of Sir Rodolphe Forget, who built part of that railroad. I would like to put on record a motion which was placed at my request on the order paper, at the beginning of this session. It deals with the purchasing and improving of that railroad. I quote:
That, in the opinion of this house, the competent authorities should give early consideration to the advisability of (a) purchasing the railway communications between Quebec and St. Joachim; (b) improving the line between St. Joachim and La Malbaie, in the county of Charlevoix; (c) extending the said communications into the county of Saguenay, by way of Clermont, county of Charlevoix, in order to facilitate the development of the immense resources of Ungava, to make the district more accessible and to provide a railway system for that important part of Canada in a national emergency.
To establish clearly the geographical position of this railway, I should point out that the district of Charlevoix is east of the city of Quebec. The present railway leaves Quebec, crosses the municipalities of Chateau Richer, Ste. Anne de Beaupre, famous for its shrine, Beaupre which boasts a paper mill and a distillery, reaches St. Joachim, continues to petite riviere St. Francois, crosses Baie St. Paul, linking the parishes of St. Hilarion and St. Urbain, passes through St. Joseph de la Rive and from there to St. Irenee, Pointe au Pic, Murray Bay and finally Clermont.
The district of Charlevoix has a population of close to 40,000 whilst the district of Saguenay, as the hon. member for Saguenay pointed out yesterday evening, has a population of approximately 35,000.

It might be well to put on record what Mr. Meighen thought of this railway in 1916, when speaking in the debate. At that time, naturally, approximately 85 per cent of the Charlevoix railway was built. Construction had been started by individuals and assistance from the government had been sought in order to complete the railway. Here is what Mr. Meighen said, as reported on page 4014 of Hansard for 1916:
(Text):
When they sit by. therefore, and see their hopes being dispelled by the destruction year by year of the money that has already been spent by private enterprise to reach them, it is no wonder, particularly when they are being called upon to pay their share in connection with other railway projects, that they feel that they have a claim to some recognition at this time. What I want to emphasize is this: These people have a claim that differs entirely from other districts, in that millions of money have gone in there and that that money is being gradually sunk, being almost literally washed away by the river St. Lawrence and by the other corroding acts of time. The longer we wait the more we shall have to pay at some time in order that that district may get the service to which it is entitled. If the population is there-and those who ought to know say it is-and if the population is sure to come-and those who ought to know say it will come-then there will be vindication, there will be justification of this measure. Let us now look upon the matter in the broad way in which we ought to look upon it, even in a time like this.
I wish also to put on record what Sir Wilfrid Laurier said in the same debate.
The usefulness of the railway has been recognized by all governments.
And again:
It is true we are living in strenuous times, and that perhaps now is not the most propitious time we could choose; it is true also that we should be as careful as possible about launching into new enterprises. Unfortunately, this is not a new enterprise, and for my part I should like to see it completed.
(Translation):
Following this discussion, the house then passed an act authorizing the government to purchase the Charlevoix railroad and also that line running from Quebec to St. Joachim. The Canadian National then used this legislation to purchase the railroad between Clermont and St. Joachim. What remains to be expropriated now is the part belonging to the Quebec Railway, running from Quebec to St. Joachim, over a distance of about 30 miles.
More than two million people travel on this part of the railroad each year. In 1950, close to 450,000 tons of freight were shipped over that railway line.
Naturally, this is a rather complex problem and the Canadian National cannot be blamed for improving a railway section not linked to its main system. If we look into the possibility of building a railway on the north shore, where part of the road already crosses
The Budget-Mr. Maltais the county of Charlevoix, it would be important that the government use the powers provided for in the 1916 legislation in order to expropriate the Quebec Railway so as to increase as much as possible the benefits obtained by the operation of this railway.
It is not difficult to understand why the Canadian National shows an operational deficit on the Murray Bay service since the better part of the revenue is acquired by the Quebec Railway which operates the train over 30 miles through the most profitable part of the district.
I am now concluding my remarks since I firmly intend to introduce the same resolution during the next session and to discuss it at length. I am sorry that during this session circumstances and parliamentary procedure with which I am unfamiliar have made this impossible. The resolution itself is only postponed and I hope until such time as it comes up again the government will seriously take up the matter.


Mr. A. Phileas Cote (Malapedia-Malane):: Mr. Speaker, since yesterday, the budget debate seems to have become a first-rate French-speaking contest; I shall therefore speak in my mother tongue.
We are asked, under the present budget, to approve additional taxation which will require us Canadians to pull in our belts to the same extent as our cousins in England. Present conditions offer at least one advantage; it is that we are placed on an equal footing with them. Let us hope that they are as happy as we are about the turn of events.
Let us also hope that the money the government will derive from these taxes will not serve exclusively to kill human beings and that we will become no more hysterical on this side of the Atlantic than our British cousins. For if we are to judge from their attitude our friends over there have kept their heads as well as our money. To my point of view, this does not indicate that people in the most vulnerable country are panic-stricken or that there is either an imminent or a remote danger that we shall witness the end of the world.
This attitude on the part of our friends in Great Britain should mitigate somewhat the hysteria which has overtaken far too many people on this side of the Atlantic. This hysteria, in fact, has done little to promote the cause of peace in our world; should it not be held in check, it may well not only jeopardize the cause of peace but, there and then, the future of the civilized world. I do not think that our crusade in Korea will constitute in the history of mankind a page which will be

The Budget-Mr. A. P. Cote a credit to our modern Caesars. In spite of the rather dark prospects in Europe, it is not so sure that the efforts made will be necessary and if they should be that they will necessarily be successful. Nor would this be, for practical purposes, an epic in- the history of the world.
Therefore, we might be well advised to examine, and examine most carefully, the proposals put forth, before taking a header in boiling water, or rather in boiling oil, since that is, in my opinion, the true purpose of the feverish preparations going on on both sides of the barricade.
It would then be possible to analyse, from all its angles, a problem that may soon prove to be insoluble in this era of the atomic and germ bombs.
After such an analysis, it might not be so chimerical to hope that by clothing, feeding, housing and caring for those we wish to liberate-and let us not wait four years to do so-our century may become the era of the humble people without anyone resorting to the atomic or germ bombs.
Such a political trend might make it easier to provide funds for the welfare of our own people, here in Canada. For in this country, as in Europe and Asia, some people would certainly be less inclined to serve an ideology other than democracy, were democracy itself to give them less cause for criticism or even, simply, for doubt.
I,	for my part, am of the opinion that the saying "the spirit is willing, but the flesh is weak" truly applies not only outside of Canada, but within our very borders.
There is no point in deceiving ourselves. We must admit that there are some people in this country who have been expecting since 1945 the benefits supposedly accruing from the beneficial legislation of 1944: reconstruction and social welfare legislation.
Farmers, fishermen, workers, merchants, the whole population indeed, and especially the people of Quebec in these various spheres of activity, have been waiting ever since 1945. But, like sister Ann, they have seen nothing coming in so far as the implementation of these measures is concerned. I will be told that Ottawa is still waiting for permission from some legislatures to proceed with the plans set forth in 1944.
I will be told also that legislation concerning family allowances, unemployment insurance and various kinds of pensions has already given the desired results.
[Mr. Cote (Matapedia-Matane) .1
But I am sure, as I was in 1946, that the most efficient way to oppose the false prophets either in this country or elsewhere is- but allow me at this point to quote what I said at page 79 of Hansard, March 19, 1946:
The nations, aware of the fact that the inescapable realities of our time make it imperative for them all to reorient their thinking with regard to their respective sovereign state authority in relation to world wide sovereignty, will, I hope, establish a universal government.
As far as Canada is concerned, I am sure such an achievement presents no difficulty because, fortunately for our times, we have here in our Canadian government, statesmen who are not afraid to tackle new responsibilities in correlation with rights based on functional contributions.
Such a universal government would- provide social peace, as well as national security. It would accelerate free trade and ensure full employment. Full employment, in turn, would bring about better education, better medical care, better housing and more food. With social security at home, no country need fear for its national security, as long as similar conditions prevail all over the world and particularly in the neighbouring countries.
And to ensure a better distribution of wealth, which is, of course, the best safeguard against aggression, it would implement international monetary agreements, provide a proper administration of stabilization funds, international banks or at least clearing houses.
Eut, most of all, I firmly believe that the most important factor to co-ordinate and consolidate all elements conducive to peace is a world-wide unity of purpose. Such a unity can be reached only if all the peoples consider the world in its true perspective and from the same angle. Such an achievement can only be reached through public enlightenment. Before loving one's neighbour as oneself, one must at least know him. Thus people must be made to know each other, to respect one another's property, to understand one another's way of living and in return expect to be known better, understood better, liked Detter, through a professional job of international communications, incorporating all kinds of vehicles of information.
I will not make so bold as to offer here a panacea for the world's ills, but neither will I make a show of false modesty by hesitating to express my views in this debate, to all practical or impractical purposes, in the interest of this country and of its people. I am all the more confirmed in this view by hearing and seeing in action some of those who have taken upon themselves to correct the vices of others in the national or international sphere, a most thankless business indeed.
(Text):


Mr. Hodgson:: Mr. Speaker, I should like to know what the hon. gentleman is quoting from.
(Translation):


Alphonse Fournier: Continue.


Mr. Cote (Matapedia-Matane):: May I
suggest-

(Text):


Clayton Wesley Hodgson: May I ask the hon. member a question? I should like to know what he is quoting from.


Alphonse Fournier: He
said it.


Douglas Charles Abbott: Like Dr. Bruce, full notes. (Translation):


Alcide Côté: May I, in
conclusion, suggest to the commoners in this house, whose duty it is, both on the national and the international levels, to set the course of our policy, keeping in mind what might be achieved, for example, by a universal government equipped with legislation, the observance of which would also be entrusted to a universal force-consider for instance how much the humanization of mankind might be furthered through education rather than coercion, through amenity rather than austerity-may I say: social security and national security, yes, they are necessary; but not necessarily through war and austerity. (Text):


Mr. Speaker:: I declare the amendment lost.


Some hon. Members:: Question.


James Garfield Gardiner: Mr. Speaker, I was paired with the hon. member for Souris (Mr. Ross). Had I voted, I would have voted against the amendment.
Rinfret
Rcberge
Robertson
Rochefort
Rooney
Ross (Hamilton East)
Rousseau
St. Laurent
Simmons
Sinclair
Sinnott
Smith (Moose Mountain) Smith (Queens-Shelbume)
Smith (York North)
Stick
Stuart (Charlotte)
Studer
Tremblay
Valois
Ward
Warren
Weaver
Weir
Welbourn Whiteside Winkler Wood-147.

Business of the House


Mr. Speaker:: The question is on the main motion. Is it the pleasure of the house to adopt the motion?


Some hon. Members:: On division.
Motion (Mr. Abbott) agreed to on division.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Dion in the chair.
The Chairman:: The house in committee of ways and means on certain resolutions. Shall I report progress?
Progress reported.



BUSINESS OF THE HOUSE

Alphonse Fournier: the adjournment of the house.
He said: Tomorrow we shall take up the budget resolutions.


Donald Methuen Fleming: Which one will be taken first? Under which act?


Douglas Charles Abbott: I am not quite sure, but I think probably the Excise Tax Act. Frankly, I had not anticipated that the debate would conclude this afternoon. It will be either the resolutions with respect to the Excise Tax Act or the resolutions respecting the personal income tax. I would hope that hon. members would be prepared to discuss either group.


Gordon Graydon: The non-controversial ones?


Douglas Charles Abbott: Yes.
Motion agreed to and the house adjourned at 6.10 p.m.

Thursday, April 26, 1951